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Beyond the Horizon
Beyond the Horizon
First in a series of Reports: Taking a long term look at the effects of British Petroleum's Deep Water Horizon Oil Spill.
Beyond The Horizon, The financial impact
As the world watches and waits to see the outcome of oil spill in the Gulf of Mexico, the people who live in the coastal region brace for the worse. The spill which is steadily growing will have far reaching effects for all the Coastal states from Texas to Florida.
The People who live in these areas are a resilient lot; they have weathered killer storms like Camille and Katrina and came back stronger than before. This Disaster, however, is of a magnitude never before seen in the Gulf Region in the past. This stands to decimate, devastate, and possibly destroy all three major types of income for the Region.
Beginning with the most obviously affected, the seafood industry. The seafood industry is a multimillion dollar business for the coastal region. It is also a far reaching business having over 45 million workers from the fishing boats to restaurant. This will be the hardest hit and the first to be impacted business because it depends entirely on the gulf for its seafood harvest.
Tour and Travel
Next is the Tourism industry, here is another major vein of gulf Region economy. A $400,000.00 dollar a year business also stands to suffer greatly because of the Horizon spill. The smell of oil may be the smell of money to the oil companies, but to tourist it is the smell of pollution. Pollution not only keeps tourist away from the Beaches, Casinos, Hotels, motels and gift shops but it can also put the Gulf States at risk for lawsuits. The civil lawyers are lining up to get a piece of the action and all it would take is for a tourist claim that he or she became ill after walking on a gulf beach or swimming in gulf waters.Then the flood gates would be open for the lawyers to go after these States already troubled budgets.
Gulf Oil Rig
Whether you consider the Petroleum Industry the “good guys or the bad guys” the truth is they too are a big part of the Coastal income having earnings close 600 billion last year. Over 200,000 people are employed by the Petroleum industry in the Gulf States Region. Mississippi is home to the third largest oil refinery in the nation. With the deep water Horizon accident, the new drilling leases that companies like Chevron, Shell and Texaco, as well as BP were counting on to boost their revenues are now gone, maybe forever. There is also rumors of new guidelines and sanctions being placed on Petroleum companies before they can drill or even possibly refine Petroleum. If this is indeed fact it could halt any new hiring that these companies had planned to do in the future. The Petroleum industry perhaps more than any other industry will affect the entire world economy.
- Gas prices will rise to cover the cost of the new Government standards imposed on the industry as a consequence of Horizon.
- Inability to acquire and utilize new leases will result in a lack of hiring for future jobs, and could possibly lead to layoffs.
- As the Petroleum company’s profits slow so will the millions of dollars paid in taxes each year to State and local economies.
- Because of the lower taxes, schools, roads, and public services suffer.
- Due to higher Fuel cost stores, restaurants, and other businesses are forced to raise prices.
- Lower tax revenues and higher fuel cost force State and local law enforcement and other agencies to cut back on man power and patrols.
- Less Police causes crime in the area to escalate and the public fear causes the population to decrease.
Once the winds of Hurricane Katrina had ceased, F.E.M.A. (Federal Emergency Management Agency) was on their way to the Coast. In the case of deep water Horizon however, there will be no F.E.M.A. .. Horizon was not a natural catastrophe; it was for all intents and purposes a man made mishap. With that in mind, the Federal Government is under no obligation to cover personal loss due to the oil spill or assist in any of the area rebuilding efforts.
Local and State impact
Should the big three of coastal revenues go into cardiac arrest it could be the straw that broke the laborers back in the region. Unemployment is already above 13% in some states, if the people are forced to take further cutbacks it could prove a death sentence for many if not most of the small businesses in the region.
This spells major trouble for State budgets; with business closing that means more layoffs and more people filing claims for public assistance. To make matters even worse, many of the gulf states like Mississippi depend on the taxes and fees from the southern counties to help shore up the extremely financially strapped middle and northern counties. Any reduction in these revenues could mean major cuts in the States budget and assistance programs are usually the first to go.
With no job and no hope of assistance these displaced seafaring workers may be forced to migrate somewhere else in order to find work. These budget cuts would cause homeless and mortgage defaults to sky rocket. Hunger and desperation can drive the most honest of men to do things they would never dream of doing under normal circumstances. In short, this could force, Southern America at least into another "great depression."
National Economic impact
The Horizon could not have had any worse timing, with America and the rest of the world (including Great Brattain) still reeling from an almost global financial crisis. It came at a time when no one had any extra cash to help, even if they wanted to. Now with the introduction of this unwelcome blob, it could very easily sabotage the entire worlds financial rebound. With every civil lawyer within a five thousand mile radius filing a claim against BP; British Petroleum in all likelihoods will go bankrupt within a year. This will leave decades of cleanup that the American tax payer will have to pay for.
Sunrise on the Ms sound
Since BP is one of its countries major industries, its fall could send shock waves through the whole of Europe; especially in extremely volatile Nations like Italy. Britain itself is not on the soundest of financial footing having spent millions of pounds on the Iraq war.
In a world unable to afford even the cheapest of goods nations like China can no longer act as the world’s cash cow. Therefore, this could be the end to the world’s bail-outs, forcing each nation to pull their own weight. If that be the case, it could force most countries to major restructuring of its financial and tax systems. This could be a major turning point in the way mankind does business beyond the Horizon.
Special Note from the Author
I would like to offer a special thanks to all of you who offered your prays and support during my recovery from my auto accident. I am still recovering so please keep up the prayers.
Thank you all so much